Iron Mountain adapts to digital archiving

Users will soon see more digital archiving products from Iron Mountain. Should the truck drivers form a union?

Iron Mountain Inc., long renowned for trucking tapes and paper documents between sites, beefed up its digital archiving services last week with the acquisition of Connected Corp. The purchase is a sign that the records management giant is adapting to changing times by including more digital archiving products in its arsenal.

Although physical vaulting provides the overwhelming majority of Iron Mountain's revenue, Enterprise Strategy Group analyst Peter Gerr said that the company is wise to make more moves in the digital archiving space. "Companies are keeping data in hard drives, not file cabinets, so I think digital archiving represents the future for Iron Mountain. It's certainly good for the businesses it serves."

A source close to Framingham, Mass.-based Connected who preferred to remain anonymous said: "There is certainly a lot of efficiencies to be gained by them [Iron Mountain] replacing their tattooed truck drivers picking up tapes with the hot new backup-to-disk technologies."

The problem, according to Gerr, may be a cultural one within the company. "Iron Mountain's legacy business is long-term storage of documents and tapes. That's where almost all its money comes from. Often in a company like this, the legacy side can be in conflict with the digital side."

Though it's unlikely that Iron Mountain will cut back on its delivery trucks and go all digital anytime soon, the availability of Connected's e-mail archiving software ArchiveStore/EM and its laptop and desktop backup product DataProtector/PC, allows Iron Mountain to offer in-house digital archiving and backup products in addition to its hosted archiving services -- a dual-offering previously only available from e-mail archiving firm Zantaz Inc., Pleasanton, Calif.

"As an outsourcer, we currently manage 1.8 billion electronic records and are growing at 1 TB every 36 hours. We know this is a market that is growing seriously and with Connected we can now offer in-house products," said Peter Delle Donne, Iron Mountain's president of Enterprise Solutions and Services, who added that he expects the Connected products to comprise 5% of Iron Mountain's total revenue.

Having 200,000 customers already in place is an advantage for Iron Mountain, but just because the records management department of a company trusts Iron Mountain doesn't mean that the IT department will. "Customers trust Iron Mountain but the challenge will be attracting these existing customers to new technologies," said Gerr.

One of Iron Mountain's chief digital archiving competitors, Zantaz, recently integrated litigation support software that helps store and retrieve files for legal cases. Litigation software is something that Iron Mountain has yet to add into its services and prefers to partner with litigation software companies when needed, according to Delle Donne.

Craig Olson, Zantaz vice president of marketing, said: "We're 100% focused on e-mail archiving, compliance software and litigation and discovery products. We have to be. It's in Iron Mountain's best interest to keep moving in this direction, but I see them as a big ship going in the direction of records management. And it's hard to adjust a ship that big."

By acquiring Connected, that big ship may have just changed its course. How much, remains to be seen.

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